Can You Outsource Your School Operations?

Philip Scott|February 13, 2018

[Editor’s Note: This post is the first of four that look at alternative funding models and approaches for Christian schools. The purpose of this series is to encourage dialogue, both within the Christian school movement and at individual schools, about the sustainability challenges facing much of the sector. While some of the ideas presented by the authors in this series may run contrary to “traditional” practice in Christian education, the purpose again is not to provide recommendations or guidance, but rather to spark thinking and discussion along these lines. We encourage readers to submit comments below the post to begin the dialogue and share ideas].

Research tells us one of the common concerns across all spectrums and sizes of Christian schools is sustainability. As churches continue to recede from planting and supporting Christian education and the middle class continues to shrink, while educational cost continues to rise, we are seeing the predominant method of funding Christian education (full tuition-paying parents) becoming more and more the emphasis—but not necessarily leading to viable financial models for struggling Christian.

There is no silver bullet to these concerns, but we must begin to explore new ways of providing a Christian education so we don’t turn into a niche service. Our movement really needs some incubators of innovation spanning topics from content delivery to business.

One such avenue Protestant schools have been slow to adopt, which promises to bring additional expertise, operational support, and potentially reduced cost, is the idea of outsourcing to an Educational Management Organization (EMO) or Private School Management Organization (PSMO). More widely known in the charter school movement, these entities often function as the operational back office for multiple schools.

Three Characteristics of PSMOs

PSMOs typically share three characteristics, as defined by EdChoice. First, they are not themselves a school but a separate entity apart from any church or individual school. Second, they help run the operations of a school to varying degrees. Some might simply support existing efforts while others might directly oversee much of the back office functions. Third, they offer these services to multiple schools concurrently.

A PSMO’s role can range from basic offerings of payroll and bulk purchase discounts to more robust offerings, including pooled professional development, hiring of staff, business modeling, academic tracking, and opening new schools, to name a few. They have the potential to allow school staff to focus on academic concerns while leaving the operational concerns to a central office that has proven expertise in handling operational issues. A PSMO can provide services a singular independent school could not afford on its own while also cutting overall cost to the school.

PSMOs Support Growth

The limited research on PSMOs points to an additional benefit to Christian schools. Not only do PSMOs provide operational expertise, but the handful that currently exist are also focused on either working with the school to grow the number of seats or opening new schools in cooperation with those already in existence. PSMOs are not just about making Christian education more affordable and operationally sound, but also helping to grow the movement where growth is possible.

Charter management organizations are largely pushing the growth of charter schools and, on average, one in three charter schools are working with an EMO or have been created by an EMO. There is no reason PSMOs cannot have a similar impact on growing the number of seats and schools in the Christian school realm.

The future success of the Christian school movement will likely require the cooperative effort of schools and PSMOs bringing together their resources and expertise to make Christian education available to a wider.

Resources

Much more has been written on EMOs and charter management organizations than on PSMOs, and in truth, the PSMO is still in its infancy. The best PSMO study I am aware of is from EdChoice.org. See their work in two separate studies:

About the Author

Philip Scott’s background is a blend of education, religion, and law. He has taught middle and high school students in Christian schools. He is twice a graduate of Liberty University—in education and from their law school—and has studied theology and law at the Southern Baptist Theological Seminary. He currently serves as ACSI’s In-House Counsel. He can be reached via email at philip_scott@acsi.org.

Now I have an acronym to put to the concept: I have wondered for years why ACSI does not become a PSMO for Christian schools. Or, if that produces conflict of interest with areas like accreditation, spin-off a PSMO like was done with Purposeful Design. Potentially huge benefit to the many (especially smaller) ACSI schools out there who could use professional assistance with back-office functions, and perhaps some additional stability for ACSI as an organization as well. Seems like it could be a win-win.

I believe that one of the ways that rural small Christian schools can grow is to partner with or start pre-schools and day care centers in other near by rural communities. We are 117 years old have changed during the last 50 years to a K-12 traditional school.
We are started another Christian school from a successful preschool and adding a great a year. The goal is to spin them off as a separate 501(3) non-profit local elementary school sending their M/S and H/S to a more central location for a parntered secondary program.
With a separate regional foundation that has an agricultural base along with crop donations from generous supports and concerned grandparents and parents not wanting the school to be heavily dependent on tuition.
Smaller churches also help to bring a supportive Christian community to the basis for community support.